Tuesday, May 10, 2016

Staples-Office Depot Merger Is Off

The merger of Staples and Office Depot, which would have created an effective monopoly on retail distribution of office supplies, has been called off after a court granted an injunction against the deal. Staples announced it was abandoning the deal shortly after the court ruling.

Office supplies are a rapidly shrinking retail segment, and the result of the scrapped deal will not mean more office supply stores. However, it will lead to more Staples store closings and fewer Office Depot stores closing over the next year.

Staples, in fact, has already started to close stores. It previously announced plans to close 50 locations in North America. The first few of those store closings have already taken place. With same-store sales down 5 percent from last year, Staples will need to close more stores. Office Depot, on the other hand, may have already closed enough stores for now as it adjusted to the recent acquisition of OfficeMax.